CRISPR spoils go to Broad and partners – for now, at least – in PTO ruling

By Marie Powers, News Editor

In a single sentence, the U.S. Patent and Trademark Office (PTO) rendered a judgment of “no interference-in-fact” in the closely watched CRISPR/Cas9 interference motion phase, neither canceling nor finally refusing the claims of either party.

On face value, the ruling favored the Broad Institute at the Massachusetts Institute of Technology (MIT), which is aligned with Editas Medicine Inc., of Cambridge, Mass. The company swiftly issued a statement commending the decision.

“We are pleased with the USPTO’s decision of ‘no interference in fact’ for the patents that have been granted to the Broad Institute for their innovative and fundamental work on CRISPR-Cas9 genome editing,” said Katrine Bosley, Editas Medicine’s president and CEO. “This important decision affirms the inventiveness of the Broad’s work in translating the biology of the natural world into fundamental building blocks to create unprecedented medicines.”

Editas has continued to invest in the genome-editing technology, easily raising $120 million in 2015 in an oversubscribed series B and grossing $108.56 million last year in its IPO. (See BioWorld Today, Aug. 11, 2015, and Feb. 4, 2016.)

The PTO case involving two patents for CRISPR, or clustered, regularly interspaced short palindromic repeats, has been regarded as a pivotal event for the intellectual properties (IP) associated with the technology, pitting MIT’s Broad against the University of California at Berkeley (UC). The UC patent, which was filed first, deals with the use of CRISPR to conduct gene editing of bacteria. The Broad patents, in a fast-tracked application, deal with editing of eukaryote genes. (See BioWorld Today, Dec. 9, 2016.)

UC has amassed an intricate CRISPR/Cas9 tie-up. In December, two CRISPR/Cas9 co-inventors, Emmanuelle Charpentier and Jennifer Doudna, entered a global agreement to recognize the other's IP rights and IP licensing deals. The agreement encompassed Basel, Switzerland-based Crispr Therapeutics AG and Cambridge, Mass.-based Intellia Therapeutics Inc., co-founded, respectively, by Charpentier and Doudna, as well ERS Genomics, founded to manage Charpentier's personal IP rights, and Berkeley, Calif.-based Caribou Biosciences Inc., which has licenses from UC and the University of Vienna to develop technologies for cellular engineering and analysis based on CRISPR/Cas9. (See BioWorld Today, Dec. 19, 2016.)

The companies also agreed to cooperate on maintaining the patent estate and on coordinating efforts to prosecute, defend and enforce their shared IP rights.

Shares of Crispr (NASDAQ:CRSP) and Intellia (NASDAQ:NTLA) both sank about 11 percent following the PTO’s ruling.

Although the judgment was “a best case scenario” for Editas, the decision ruling doesn’t necessarily mean a death knell for the UC-related parties, suggested Jefferies analyst Gena Wang. UC et al could still move forward with another set of claims and seek a second interference, appeal directly to the Federal Circuit – a process that would take approximately 18 months, Wang said – or settle with Broad to invent around any potential restrictions on Broad’s patent and, potentially, include some cross-licensing opportunities.

In a statement, the UC parties noted that, as a result of the PTO decision, “UC’s broader case, which was previously considered allowable but for the interference, is now released from the interference and may be prosecuted to potential issuance by UC, while a new interference can be sought with respect to eukaryote claims, currently pending in a separate UC patent application once they are deemed allowable.”

That public declaration notwithstanding, Wang put her money on the last of the three options as the most attractive to the UC parties and the most likely outcome.

“Given that the use of single guide and tracrRNA (claims in UC patent application backed by clear evidence) are fundamental to the CRISPR technology, we believe cross-licensing could eventually likely be the path taken by both parties where NTLA/CRSP could license from EDIT the use of CRISPR in eukaryotic cells, while EDIT could license from NTLA/CRSP the use of single guide and tracrRNA,” Wang wrote, suggesting royalties might be set in the mid-single-digit range.

If the Court of Appeals for the Federal Circuit does become the next stop for UC, it will also likely be the last stop, due to the absence of any question of the fundamentals of patent law.